An ‘Obamacare’ Cost Explosion? Hardly — GOP Distorts CBO Report

By Sahil Kapur

March 15, 2012 10:09 am

Republicans and conservative media are cherry-picking a figure in a new Congressional Budget Office spending estimate (PDF) to assert that the cost of “Obamacare” has nearly doubled to $1.76 trillion. But the claim ignores the corresponding savings during the additional period of the spending projection, thus distorting the actual cost estimates of the law.“The new CBO projection estimates that the law will cost $1.76 trillion over 10 years — well above the $940 billion Democrats originally claimed,” Rep. Tom Price (R-GA), the No. 4 House Republican, declared in a press advisory. Republicans on the powerful Energy & Commerce Committee said the CBO report “reveal[s] a shocking new sticker price of $1.8 trillion.”

Fox News and other conservative outlets have trumpeted the out-of-context number as vindication for those who warned that the Affordable Care Act will cost far more than advertised.

CBO’s actual revised estimate is that the “gross costs of the coverage provisions,” — the money used to provide people Medicaid or private insurance — has risen by about $50 billion over the 2012-2021 period since its previous estimate, from $1.445 trillion to $1.496 trillion. That’s the only relevant change to spending projections in the report.

So where are conservatives getting the idea that the cost of the law doubled? When it passed in 2010, CBO said its 10-year outlays would be about $940 billion. But because the law isn’t set to be fully implemented until 2014, when the coverage expansion takes effect, that initial estimate included several years in which the law cost very little. Now that it’s 2012, CBO’s 10-year outlook captures more years during which the law will be in full effect. The law’s price tag appears higher, but its costs in no way doubled.

Conservatives, however, want to use the effect of this sliding window to make it appear as if the health care law is a budget buster. But this latest CBO report focuses exclusively on the law’s spending provisions, and ignores its savings — the taxes and spending cuts, that also mostly take effect in 2014.

Indeed, CBO still holds that the law reduces the deficit by billions of dollars over 10 years. That’s just not in this report.

“CBO and JCT have not estimated the budgetary effects in 2022 of the other provisions of the ACA; over the 2012-2021 period, those other provisions were previously estimated to reduce budget deficits,” the CBO report reads.

All of which means that the cost projections have only experienced minor changes in the CBO report, a far cry from the conservative claims that the Affordable Care Act’s price tag has skyrocketed or doubled.